Mr. Alan
Bernon
209 Cliff Road
Wellesley Hills MA 02481
I am pleased to
offer you the position of President of Dean Foods Dairy Group
(the “Dairy Group”) , effective January 1,
2006. This position will report directly to me. We are delighted
that you are willing to accept this new responsibility and I look
forward to having you join our team in Dallas in
September 2005.
Here are the
specifics of your offer:
We contemplate
an initial term of employment through January 31, 2009. You
will be paid an annual base salary at the rate of $600,000 for the
last four months of 2005 and for all of 2006, $650,000 for 2007,
and $700,000 for 2008.
Effective
September 1, 2005, your annual bonus target will be increased
to 70% of your annualized salary, subject to the achievement of
pre-established operating targets for the Northeast Region.
Effective January 1, 2006, when you assume the role of
President of the Dairy Group, you will be eligible to earn an
annual bonus with a target amount equal to 80% of your annualized
salary, subject to the achievement of certain operating targets for
the group. You can earn up to 200% of your targeted bonus if
operating targets are exceeded.
Stock
Options and Restricted Stock
In
September 2005, you will be granted 20,000 restricted stock
units (RSUs) as a signing bonus. In January 2006, you will be
granted (i) options to purchase 276,000 shares of Dean Foods
common stock and (ii) 75,000 RSUs. This award reflects an
“upfront” three-year grant. The exercise price of the
options will be the closing price of a share of Dean Foods stock on
the date preceding the date of grant. The options and RSUs will
vest in equal installments over a period of three (3) years,
beginning on the first anniversary date of the grant and fully
vesting by the third anniversary of the date of grant. Any stock
options which are or which become vested on or prior to your
termination of employment shall remain exercisable for a period of
no less than twelve (12) months following your termination of
employment. Commencing January 2009, your eligibility to
participate in the long term incentive program and the amount and
nature of any future long term incentive awards will be determined
by the Board of Directors.
Mr. Alan
Bernon
September 7, 2005
Page 2 of 4
Management
Deferred Compensation Plan
You will be eligible to participate in the Deferred Compensation
Plan. The plan provides eligible executives with the opportunity to
save on a tax-deferred basis.
You will be
granted five (5) weeks vacation. Unused vacation is not
carried forward from year to year.
We want your
move to Texas to be a positive one. The relocation benefits
provided to you include: household goods move; temporary housing;
home visits; in-transit expenses; home sale assistance; duplicate
housing costs; and, new home closing assistance. The policy
describing these benefits is enclosed. In addition, you will be
entitled to comparable relocation benefits on termination of your
employment, at any time and for any reason, other than termination
by the company for cause (as defined below).
Other
Benefit Plans
You will also be eligible to participate in all employee benefit
plans, programs, and arrangements made avai
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